BRC-Bond Dickinson Retail Employment Monitor published
The unemployment rate fell to 6.5%, continuing the trend seen in previous months – down by 121,000. However, real wages remain weak, average earnings growth shrank to 0.3%, down from 0.8% in the three months to April, its lowest growth since 2009.
The sharp rise in employment is likely to fuel expectations of an interest rate rise, especially in combination with a surprise rise in inflation, however, with the labour market an unlikely source of inflationary pressure, it’s more probable the Monetary Policy Committee will hold back any rise until next year.
The BRC-Bond Dickinson Retail Employment Monitor paints a different scene according to the latest data. A fall in the equivalent number of full-time workers is driven by a reduction in hours worked in the grocery sector, a response to challenging trading conditions.
Key highlights of the results:
• The equivalent number of full-time jobs fell by 2.5% in the second quarter of 2014 compared with the same period last year
• In the second quarter of 2014, the number of outlets rose by 2.5%, driven entirely by food retailers
• The average number of full-time equivalent staff per store fell to its lowest level indicating a drive towards smaller format stores – particularly in food
• The fall in the number of hours worked was driven by food retailers
Christina Tolvas-Vincent, Head of Retail Employment at business law firm Bond Dickinson, said: “While the long term outlook for retail employment continues to be positive the landscape remains challenging. Though food retailers have largely weathered the recession storm, they have faced tough trading conditions of late, which have contributed to the fall in the number of hours worked despite the opening of new stores. Its changing market dynamics indicate that the sector continues to undergo significant transformation, not least from fierce competition from the discounters, who have a leading role in reshaping the grocery sector, but also from smaller format stores, online and the drive for convenience.
“From our research the majority of retailers intend to keep staffing levels the same or increase them marginally, with redundancy levels remaining low. Looking further afield, pop-up retailing, which has been among the fastest growing segments of the retail sector, has the potential to further bolster the sector over the coming 12 months. Furthermore, any amendments to business rates would allow for fundamental reforms providing retailers with a greater opportunity to focus on key areas of growth such as employment.”